This shouldn't surprise anyone who watched what happened to Argentina in 2001. Eventually the government is going to do this.
Democrats in the U.S. House have been conducting hearings on proposals to confiscate workers’ personal retirement accounts — including 401(k)s and IRAs — and convert them to accounts managed by the Social Security Administration.Triggered by the financial crisis the past two months, the hearings reportedly were meant to stem losses incurred by many workers and retirees whose 401(k) and IRA balances have been shrinking rapidly.
...
GRAs would guarantee a fixed 3 percent annual rate of return, although later in her article Ghilarducci explained that participants would not “earn a 3% real return in perpetuity.” In place of tax breaks workers now receive for contributions and thus a lower tax rate, workers would receive $600 annually from the government, inflation-adjusted. For low-income workers whose annual contributions are less than $600, the government would deposit whatever amount it would take to equal the minimum $600 for all participants.In a radio interview with Kirby Wilbur in Seattle on Oct. 27, 2008, Ghilarducci explained that her proposal doesn’t eliminate the tax breaks, rather, “I’m just rearranging the tax breaks that are available now for 401(k)s and spreading — spreading the wealth.”
All workers would have 5 percent of their annual pay deducted from their paychecks and deposited to the GRA. They would still be paying Social Security and Medicare taxes, as would the employers. The GRA contribution would be shared equally by the worker and the employee. Employers no longer would be able to write off their contributions. Any capital gains would be taxable year-on-year.
Analysts point to another disturbing part of the plan. With a GRA, workers could bequeath only half of their account balances to their heirs, unlike full balances from existing 401(k) and IRA accounts. For workers who die after retiring, they could bequeath just their own contributions plus the interest but minus any benefits received and minus the employer contributions.
Another justification for Ghilarducci’s plan is to eliminate investment risk. In her testimony, Ghilarducci said, “humans often lack the foresight, discipline, and investing skills required to sustain a savings plan.” She cited the 2004 HSBC global survey on the Future of Retirement, in which she claimed that “a third of Americans wanted the government to force them to save more for retirement.”
links to hearing, testimony
hearing
This is the House Education and Labor Committee, Chair George Miller.
Wow. Doesn't it seem better to demand corporations offer traditional pensions?
Seizing half of the money, akin to social security sure is not fair. If someone has a marriage deal, then the surviving spouse should get the rest. I mean if someone is ill, needs long term care, the status quo is the nursing home seizes all assets and leaves the health spouse out on the street (bet you didn't know that, if one needs a long term care facility, like a nursing home, it bankrupts the healthy surviving spouse!)
Doesn't seem to be anything but a downloadable video so far.
My Father has decided to
My Father has decided to save in an IRA and other CD's which my Mother or I will recieve on his death instead of having a will. Are you saying that the proposed plan will leave my Mother without any inheritance if my Father passes away and they pass this?
How long has these discussions been going on?
Will return for a reply hope you or others find it worthwhile to answer.
Thanks in advance.
this is a new hearing
one proposal, one witness. An IRA and CDs are not 401ks which have different laws and are usually part of an employee retirement package.
I believe if your Dad puts joint accounts on the IRA and CDs then survivorship isn't an issue and doesn't go into a will. If they are in his name only, they probably will.
You might check with an estate planner if you are concerned.
This is a real death tax
Consider it in conjunction with the drive to raise retirement ages. So now we Generation Jones and younger workers have to work till we're 70, 72, 75...eventually 80. If we have work at all, and that increasingly means permatemping for whatever corporation will pay you $3 an hour and point you to whatever fed/state/local welfare benefits they can with dedicated public assistance computers in the lunch room (a la WalMart).
What this amounts to is harvesting workers for a required contribution to a scheme that they will likely die before realizing AND increase the chance of poverty for their surviving spouse or partner.
Reading the above piece, I actually sprouted hives.
It states IRA's and 401K's
It states IRA's and 401K's
it's a hearing, not law
it's testimony from one group, it's not law. So maybe the testimony also said IRAs but it's just a hearing, not even a bill has been introduced, much less passed.
If you are really concerned write your representatives and tell them not to do this.
I doubt such a thing would pass for taking half of retirement upon death, well, just no way is that going to be supported.
GRA
I don't mean to sound lame but what the HELL is a GRA? Government Ripoff account?
ya got it
that would be the title if they confiscated IRAs, put them under social security, guaranteed 3% and only gave half to the widow.
This stupid bill
Ahhh..another way to screw the employee and the employer at the same time. The employers contribution is part of your overall earnings and should also be part of what u can give to your heirs........Folks, get a fire proof secure lock box and don't put any money in the banks and stuff it in yer firebox
Firebox!
This sounds like the best plan to me. I am 27 going on 28 in July 2011. I and some family and other people I talked to have been screwed by banks (two banks myself). The first bank was stealing money through phony overdraft fees on regular bank accounts without any discrimination between weather the customer they stole from was rich or poor, both were beginning to loose money. I as a teen at the time supposedly owed them, but I never paid the crooks as they had already stolen $200.00 from me. Heart breaking for a working low-income teen, but when I talked about it to random people around town, I found some richer people were missing amounts like $2,000-$3,000 on phony overdraft fees. I should have blown a whistle or someone should have. The second bank did it and got busted, everyone who banked there including me got a check for the missing money or it was applied to the outstanding balance.The problem is that I will never get restitution from the first bank, because banks are only required to repay back five years and that happened more than five years ago. I will never trust another bank again.
Stay on track there Firebox
Your story has nothing to do with this subject...
401K
Apparently no one realizes that when the required withdrawals from the 401K rollover IRA begin, it forces most of us into the maximum tax bracket, for the rest of our lives. That applies to not just the IRA withdrawals, but pensions, a large fraction of Social Security, and all other sources of income. Also, it pushes the Medicare part B premium which is deducted from SS, from around $100 to around $300/month. The 401K is the worst mistake that I ever made !
401K
How do RMDs put MOST of us in the MAXIMUM tax bracket (currently 35% for incomes over $372,900)? 401(k) withdrawals are taxed as ordinary income, so unless you're already close to the maximum tax bracket I don't see how this is possible. It IS true that the long-term capital gains portion of RMDs are taxed at the higher earned-income rate (for MOST of us, more like 28% or 25%) than they would be in a taxable account (15% under current law).
Tax bracket
Most of us? Most of the middle class won't have that problem. A lot of them have no 401k or its underfunded.
We are in the 15% tax bracket now and will be when we retire. Our spendable income should be 80% 0f what it is now. We won't be contributing to the 401k, social security, and city tax where we work any more. No more mortgage payments, won't need 2 cars, kids have moved out. If you are expecting to be so rich in retirement and pay extra taxes you surly will have more spendable income than me. So whats the problem? You would rather have minimal income in retirement just to get by? If your are over funded in you 401k. Check the tax brackets and calculate what deductions you will be using in retirement and only withdraw enough to live in comfort and stay out of the other upper tax brackets. Invest in a Roth, gold, help your kids buy a house, put ur extra money in a safe. I would like to have financial security in retirement. If your going to be in a maximum tax bracket you must be well off. So whats the problem? What other retirement vehicle are you going to use to avoid paying taxes?
ira confiscations
I AM SO ANGRY I CAN'T SEE STRAIGHT....FROM THE OUTSET I FELT IN MY BONES THAT THIS SOB-IN-POWER WAS BAD NEWS. COURTESY DEMAND THAT I DON'T USE THE LANGUAGE THAT COMES TO ME TO DESCRIBE THESE PEOPLE. TO YOU WHO WILL FIND A WAY TO JUSTIFY/WELCOME THIS GRAB, ONE LONG TIME RADIO MONEY ADVICE GUY STATED THERE WILL BE SOME, I WISH PEOPLE LIKE YOU, SPINELESS, GUTLESS, SLAVES THE WORST OF LIFE. GRANDMOTHER IN FLY-OVER COUNTRY.
Wait - the original post was
Wait - the original post was in 2008 under Bush. You are really angry in 2010, but has this actually transpired? What is the update?
it was a plan from 2008
obviously not passed by Congress, nothing happened. The keyword is "plan" and the public outcry killed it dead.
Democrats did not seize your retirement....but Wall Street did!
WALL STREET
No, the Feds and the bankers want our money. Please wake up and stop blaming everyone else. Do your homework.
Democrats have controlled
Democrats have controlled congress since January, 2007, Bozo.
This would be the straw to
This would be the straw to break the camels back.
If they want to instigate chaos and a break down of society, high crime leading to civil war leading to a military state, this would be a great way to do it.
Won't Happen
Most of us who have 401k and IRA got a bad haircut and Washington suspended the RMD for 2009. They should suspend it again (but won't for obvious reasons). A tax credit to offset RMD would be stimulative, but that will not happen. Best strategy IMO is to take advantage of low income years (after age 59-1/2) and begin gradually transferring IRA balances to ROTH IRA.
Frank T.
stuff your mattress instead
to me ..the selling of all the natl parks ...the dubai ports ..and now your retirement money ...this is just telling you how broke and desperate the govt is ...i mean if taxing you to the high heavens isnt enuf ...and bailing out banks on fiat currency (not backed by a piece of s***)..the fed res isnt a branch of govt in case you didnt know ..you know what fascism is ? i smell a revolution ...but with that ...you never know what youll get after ....a restoration of the constitution is whats needed .. oust these treasonist entities like the fed and cfr ..trilats ...you dont know whos controlling you
401K's and IRA CONFISCATION
The FDIC completed auditing your IRA and 401K accounts in Feb., 2010. According to insiders, the plan is to wait until the market crashes and then through scare tactics, offer an option of a voluntary fixed annuity of 3%. If it is refused, then it becomes mandatory. The SS Trust was the biggest ponzi scheme ever implemented by the democratic party. Every negative impact to the Trust was created an implemented during a democratic administration. FDR created the SS Trust during his administration; however, the Trust was never to be depleted. Now that is gone, and as liberal as he was, he would turn over in his grave if he knew what his party did to the Trust. He did enough damage on his own. The GRA's are to be administered by SSA, so what makes you think the same thing will not happen again, since it is their plan in the first place. If you think this can't happen, look at what happened in the spring when computer traders made a wrong trade and sent the Dow down 600 pts in one day. The 60 Minutes episode, 10-10-10 showed exactly how this could happen, accidently or otherwise. This has happened to two countries in the recent past, do think BO is above doing this to our nation? If you think not, think again.
Social Security, retirement, Folks reading this post, read this
This post is getting a lot of reads. People, realize this entire agenda is coming from Wall Street, not elected officials, except they act as Wall Street Puppets. The entire thing, attacking your social security for privatization, reducing pensions, any of it, is about Wall Street wanting to get to those large funds and gamble with them.
Don't think you can vote either party and remove the privatization eyeballs on your retirement or the other direction, reduce your retirement to give those funds to the uber-rich.
Also, No bill was passed, this was simply a congressional hearing. Lots of silly stuff, including Bill Gates getting his own hearing spewing lies, has happened in Congressional testimony. Why just recently a comedian testified before Congress.
Social security is not a Ponzi scheme. In fact it's the Only Retirement Pension many seniors have. You want to protect and guarantee social security at all costs here.
SS Ponzi
Yes. SS is a Ponzi scheme. Look up the definition of Ponzi scheme and compare it to the social security system. Like all Ponzi schemes the people who got in early and didn;t pay jack into it made out like bandits. People like myself who have been robbed for most of my life paying into it are screwed. If Big Brother had allowed me to just keep that money and invest it, I'd be rich.
Americans wake up!
Stop letting them keep us divided into red/blue, democrat/republican, left/right, coke/pepsi, mcdonalds/burger king. This in-fighting keeps our eyes OFF the prize! Its the guys behind the curtain who pull the strings. Take a step back, see the whole picture. And stop pointing the fingers at the wrong people. They keep us fighting amongst ourselves and we can't move forward that way!
The whole system is corrupt.
You work your butt off 40 hours a week, they take their share and put it in their pockets! The republicans spend on defense, the democrats spend on social programs. Whatever! They take your money either way. And they sit back and watch you yell, blaming the democrat president or the republican senator, as they laugh all the way to the bank. Oh wait - they ARE the bank.
dont let them divide us into red and blue
I feel the same way about demo and rep. Once we elect you, you are no longer red or blue. You are America elected lobbyist. You should not be for sale to any group for personal or finanical gain. You are our spokesman and we are GDI(gauld darn independent) If you are true lobbyist for the people then you will rat out the crooked politicans to ensure that they are not elected again. We need leaders not politicans. We are not socalist, we are capatalist. Those that dont contribute need to be culled from the system. I am in fear that American will unite and demand that the gov. do what they are sent for, or a revolution of some type is imminent. Why is it that oridnary people have some common scense answers to a lot of the problems that are facing us, and the brains that we elect seem to not have anwsers. What part of illegal do they not understand. I compare it to 6 people in a life boat that will only hold 5. Someone has to go, and we have to take care of our own citizens.
Americans wake-up
I completly agree Oz!!!
IRA Confiscation
The government and the Congress if they pass this should expect a very large and well armed insurgency against them. This would be a criminal act by the government, one of a continuous string, and would have at least this individual armed and hunting and not Deer hunting.
Sic Semper Tyrannis!
Uncle Sam is a felon
Until the recent recession awakened this country, the U.S. savings rate was less than zero (yep, it was negative). That means Americans were living beyond their means and saving nothing for retirement. My question is...why is that my problem and why should it require government intervention?
Some Americans don't have life insurance, should the government get involved? Some Americans don't get proper nutrition, some don't exercise, and some don't shower regularly....should Uncle Sam step in?
In August 2010, Treasury Secretary, Tim Geithner, made a public announcement that Social Security is now paying out more than it is taking in (it's bankrupt). Do you really want the Social Security Administration as the fiduciary for your retirement when they can't even manager their current respnsibilities for Social Security?
If a GRA plan holds such promise, make it voluntary to Op-In. As for me, I'll take my chances and manage my own financial future.
you play right into their hands of fear
they WANT to privatize social security in order to STEAL from you. So, you do NOT want them to privatize social security and should DEMAND that promise is there for your future.
These special interests have been after social security to put those funds on the stock market for over 30 years. It's bullshit. It's not insolvent and easily fixed.
With some budget calculators, one can easily balance the budget with other methods. I did it in 5 minutes w/o touching social security or Medicare.
People, firstly this post was a hearing and due to it's popularity, a host of fear mongers are seemingly taking a congressional hearing as fact or a bill and that is not so.
Secondly, social security is YOUR money. People government in the U.S. is supposed to be for and by us. You need to demand that plus demand your right to your money you put in the SS fund....
not run around like beheaded chickens and proclaim you're going to do exactly what a bunch of special interests want you to. Out of fear you're running straight into the butcher's net.
ira 401k
give them all pinkslips lets go back to the 1800 and serve justice for horse thieves the way it should be hang em high people we get ripped off every day by the political machine we are taxed on just about everything we buy I.R.S is a legal way for them to steal from us where is our buddy who speaks for us oh yea every 4 years for pres. and 2 years on the other they will keep promising sunshine and then pee down our backs and tell us it is still sunny we the people need to vote out the crooks and get some honesty back in our government I know I made a joke
Gentlemen and (women)Our
Gentlemen and (women)Our government is out of IOU's that anyone will take. In recent years, the Chinese were buying up to 2/3 of treasury auctions and we can't feed them any more junk - they laugh in our face. Now our government is looking to force feed them to our retirement accounts and cook our goose! If they take over 401(k)s and IRA's they can set "guidelines" for investments that put most of this money into our very own worthless treasury bonds. "Bonds" are safe. Most banks and insurance companies had requirements to keep a percentage of investments in gov't and private bonds until Wall Street Banksters got creative. Used to be for widows' and orphans' funds until derivatives packaged junk and called it "bonds" The entire pension system in America is the only place that has enough cash to gobble these Treasuries up. The gov't can refinance our debt to ourselves and future generations by making pension funds buy this junk. They want to pay 3% because everyone else on the planet would charge alot more. The risk is the country risk of the solvency of the USA. As long as oil is denominated in dollars we're OK. Alot of talk to change that, which would change Everything. I can't tell you where to put your money. I might cash in my IRA and buy a farm. Any comments?
I have a comment
This post is about a hearing. A hearing is not a fact, a bill, a law. Someone picked up on this post as fact and it is just a Congressional hearing.
Cashing out 401ks, IRAs and running to the hills is insane frankly.
It's already happening in other countries
Hungary just passed their bill to take their citizen's IRAs and put it in the gov's control. Just as Argentina did.
Gulp.
Only on the internet!
You people are replying to a rumor thats been on the Internet for three years now. Get all excited! Someone started spreading a lie to get u all worked up. Its funny that there isn't any newspaper reports of this. It would be all over the nation on TV the radio. But no, only on the Internet. No official records coming out of Washington. Nothing!!!!! Google "401k money grab" or "401k confiscation" Hundreds of posts and blogs come up. But there are no facts to back it up. What a joke on you. Sounds like a political scare tactic to fool the uniformed and gullible. Hows it feel to be suckered in? What information do you people use to decide who to vote for in elections? Lies on the Internet?
the post is not a lie
There were hearings, but I agree, someone picked up on this little blurb and we have full bore conspiracy theory thinking a minor hearing is law, legislation or policy. It is not!
Believe me people if this was really happening, not only would we be writing about it, but a host of others would too.
I've put I don't know how many comments on this thread to this effect.
Robert, thanks for nailing this one!
Anxiety over "might happen" is pointless. People, read the United States Constitution "No person shall be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." That means the only way the government can steal your savings is through taxation or inflation. No matter what Alan Simpson wishes, the law is the law. Only a suicidal politician would support a law to confiscate your IRA. As for inflation, Uncle Ben keeps trying but his center of gravity seems to be stuck.
Frank T.
As a 24 year old recent
As a 24 year old recent graduate, I absolutely hate that the government is taking my own decisions out of my hands and making them for me.
I KNOW how to plan my own retirement. I don't need the government taking money from me, putting it in social security for "my future" and controlling it for my entire life.
There is no way to maintain social security because POPULATION is not constant. Social security is running out of money.
If I can manage to fund my own retirement accounts at $1,500/year, save $5,000 toward the down payment on a home, and graduate from college debt free (and paid for with my own money... made at my very own minimum wage job) then I'm sure others can too. I graduated with $10,000 in savings and good credit.
Why does the government have to plan my retirement for me? We are not children. Learn how capitalism works and then use that.
Don't go into deep into debt.
Read your loan agreements.
Work hard at school or at a trade.
Learn about financial systems.
I live below my means even though that means not being able to afford (among other things) a heater, a sofa, a television, cable, new clothing, trips to the movies, etc.
I do understand that there
I do understand that there are many, many citizens who paid into social security their whole lives and would be in a very bad place if it was suddenly gone.
I dislike social security, but I would prefer to pay into it my whole life (so that those who came to depend on it would not suffer) and never see a penny of it if it meant it could be phased out.
The fact remains two
The fact remains two Congressmen presented the legislation. That alone is scary enough.
Banks suck!
Banks Rip People off with Overdraft fees. I will never trust another bank as long as I live. I trust the firebox Idea.
They couldn't manage what they already took from us
And now they want take more, as if they are doing this for us?
When they gave amnesty to the 10M+ illegals, how much of a drain did that put on the SS system? How much money was given away to people that contributed zero $ to the system?
How much money was given away to social programs that were never meant to be financed by SS? The politicians, who by the way have their own retirement system, are handing out our, and our employer's hard earned money, so they can get the votes to keep them elected.
The fact that this is even floated as an idea alarms me. This is not what a Democracy does. This is what Dictartorships do.
When has the Government managed anything properly?
Social Security
Social Security has been depositing money in surplus and is fine for a number of years. The false attacks on Social Security are said with a straight face by both parties and need to be taken seriously. Until Congress is able to be honest about Social Security and place the deposited money into a system that is safe from theft, no other money from any kind of retirement system should be placed into the Social Security system. If they can destroy it, rob it, deny it, they will.
Government Wealth Confiscation and Redistribution
The Democrats and their schills have already stolen trillions in American Wealth, now they want to get their greasy snot covered fingers into the wealth of those who have responsibly invested and saved to take care of their families. I am not giving up what I have saved and worked for all my life to prop up the butts of 40% of population who are wastrells and losers. If it means civil war then so be it. There comes a time when you have stand for your rights and lose your life if called for.